Business Directories

Majid Al Futtaim in Egypt push; to issue sukuk soon

Dubai, October 24, 2011

Dubai's Majid Al Futtaim may issue a planned sukuk programme as early as next month and is pushing ahead with growth plans in Egypt despite operations being severely hit by months of unrest, its chief executive said on Monday.

The mall developer, which is the sole franchisee for hypermarket chain Carrefour in the Gulf, was forced to shut down its malls and hypermarkets in Egypt due to riots following an uprising against former President Hosni Mubarak.

The company is now racing ahead with plans to grow in Egypt as it seeks financing for a new mall.

'We're discussing with banks to get 13-year financing in Egypt ... we are in talks with local banks in Egypt for this,' Iyad Malas, the CEO of Majid Al Futtaim told the Reuters Middle East Investment summit.

'For shopping malls you need ideally 10-year money but that is not always possible. We have to be realistic now.'

MAF currently has two malls, three hypermarkets and some supermarkets in Egypt. Malas said the company has every intention of tapping the market and is planning a sukuk that may be launched as early as next month.

MAF completed roadshows for an offering from its $2 billion medium term notes programme in June but chose not to issue a bond because of unfavourable market conditions.

'We are in a comfortable position to see when the right market opportunity is available. Whether a sukuk or a conventional bond, it can by issued in one month or five months or six.'

'It's a question of finding the right market opportunity.'

Part of the funds from the sukuk would be used to finance new investments, including the new mall in Egypt.

Malas said the company is sitting on liquidity of over five billion dirhams and has no immediate need for financing. The mall builder's expansion plans in Syria is facing challenges due to the political turmoil in the country.

A master plan is in place for a new development outside Damascus to build hotels, mall and other projects. The value for the first phase of the project is worth $1 billion.

'If we continue at same pace, in Feb 2012 we will have to make a decision on whether we go ahead with construction,' said Malas. The company is also exploring the possibility of growth in Libya and is slated to open its first Carrefour outlet in Iraq later this year. - Reuters